Broadcom's AI guidance miss drags the Nasdaq lower. SpaceX locks in $135 a share for the largest IPO in history. And oil is back near $97 as Iran tensions refuse to die.
The week had barely started before the chip sector handed the market its first real test of June. After Broadcom reported fiscal Q2 results Tuesday evening that technically beat on revenue and non-GAAP EPS, the real story was in the guidance: Q3 AI chip sales of $16 billion versus the $17.2 billion analysts had priced in. No raise to full-year AI forecasts. The sell-the-news reaction was swift and punishing — Broadcom shares fell more than 14% in premarket trading and dragged the Philadelphia Semiconductor Index with it.
Broadcom's Q2 print — $22.19 billion in revenue against a $22.13 billion consensus, non-GAAP EPS of $2.44 versus $2.39 expected — would have been celebrated in a different tape. But the market wasn't paying for what happened; it was paying for what comes next. AI chip sales guidance of $16 billion in Q3 fell $1.2 billion short of the Street's model, and the company's deliberate choice not to raise its full-year AI semiconductor forecast read as a yellow light, not a green one. CrowdStrike fell 11% on rising expenses alongside in-line guidance, adding pressure to software names.
The broader message from the AVGO reaction is uncomfortable: the AI trade has been priced to perfection. Any guidance that isn't aggressive enough to justify the multiples gets punished. That dynamic does not disappear overnight.
While chips were selling off, Elon Musk's SpaceX made its IPO concrete. An amended S-1 filed Wednesday with the SEC confirmed a fixed price of $135 per share, 555.6 million Class A shares, and a targeted raise of $75 billion — the largest IPO in history. The implied valuation of roughly $1.77 trillion would place SpaceX above Tesla (currently ~$1.6T) and make it the seventh-largest U.S. company by market cap on arrival. The roadshow kicks off Thursday. Pricing is expected June 11, debut on Nasdaq under ticker SPCX on June 12.
"This is not a company that needs the money. It's a company that decided it was time to let the public into the trade."
— Markets commentary, Wednesday session
Goldman Sachs leads the deal, with Morgan Stanley, BofA, Citi, and JPMorgan in the bookrunning syndicate. Musk will retain over 82% voting control after the offering. The xAI-SpaceX merger completed in February adds an AI angle to what was already a space and satellite story. The $135 fixed price — unusual for an IPO of this scale, which typically uses a range — signals confidence, or at minimum a desire to project confidence.
The other thread running through Wednesday's session was energy. WTI crude climbed back toward $97 as conflicting reports circulated about the status of the 60-day MOU framework between the U.S. and Iran. The ceasefire — announced in principle in late May — has never been fully signed, and Thursday's ADP private payrolls print of +122,000 (above the 117,000 consensus) added a layer of inflation concern: stronger labor, stickier wages, less room for the Fed to move.
| Asset | Level | Chg | Note |
|---|---|---|---|
| WTI Crude | $96.80 | +2.1% | Iran diplomatic uncertainty |
| Brent | $98.30 | +1.9% | Hormuz risk premium intact |
| 10-Yr UST | 4.52% | -2 bps | Flight-to-quality muted |
| VIX | 18.4 | +1.8 pts | Fear gauge ticking up |
| DXY | 103.7 | +0.3% | Dollar firm on rate hold path |
Thursday morning brings continued fallout from the AVGO miss, with AMD and Intel expected to face sympathy pressure at the open. The SpaceX roadshow formally begins, and institutional desks will be marking positions ahead of Friday's May jobs report. The consensus for NFP is around 85,000 — a number that already seems conservative given Wednesday's ADP beat. A materially stronger print would reset rate expectations and add volatility to an already nervous tape.
The Warsh Fed meets June 16–17. Every data point between now and then is a tile in the mosaic his first press conference will have to address.
The Broadcom miss exposed the fragility underneath the AI trade's confidence. When the best guidance in the sector isn't enough, valuations are the problem. SpaceX's $1.77T debut will demand index capital at scale — the timing, the week of a semi selloff and an NFP print, is not ideal. Oil's refusal to fall cleanly keeps the stagflation arithmetic alive for June's FOMC.
This is a market that still wants to go higher. But it just got reminded that wanting and deserving are different things.
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